Distributive impacts of forest resource policies in Alberta

Economy-wide and distributive impacts of: (1) an $80 million increase in pu lp and paper exports; (2) a $10 million decrease in lumber exports; (3) a 2 5% increase in the costs of timber production; and (4) a 25% increase in th e costs of pulp and paper production in Alberta's forest sector are examine d. A social accounting matrix (SAM)-based quantity model is used to examine the first two shocks, while a SAM-based price model is used to analyze the last two shocks. The results of the quantity model suggest that higher inc ome households get a larger share of the benefits than lower income househo lds in response to an expansion in the pulp and paper industry, A contracti on in the lumber sector will hurt higher income households more than lower income households. Larger shares of medium and higher income households in total labor income and capital rents are identified as reasons for this asy mmetric response, The results of the price model suggest that additional co sts associated with sustainable forest management and environmental regulat ions will hurt lower income households more than higher income households. The higher share of consumer expenditure in total income for lower income h ouseholds when compared to that of high income households may be responsibl e for this result.